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Anti-Spamming Laws? Businesses Want Them, Consumer Groups Don't
Subject Price Ceilings and its Effect on the Market
Topic Market Failure, Regulation, and Public Choice
Key Words Regulation, Lobbying, Costs, Opportunity Cost.
News Story

New bills being proposed in both the House of Representatives and the Senate would strictly limit the ability of firms to send spam email. These regulations are being praised by firms, especially because such regulations would penalize those who send out deceptive email. Businesses believe that such attempts to deceive the public give spam email - just another form of telemarketing in their eyes - a bad name.

Consumer groups, who favor much tougher legislation, fear that it doesn't go far enough, and could potentially create even more spam. While most people agree on the need to regulate spam email, citing a Ferris Research study indicating that spam email costs $10 billion annually in lost worker productivity, lost bandwidth, and technical support costs, no one can agree on how far the legislation should go.


(Updated August 27, 2003)

Questions
1.

What did the article imply was the indirect (opportunity) cost of spam email?

2. Demonstrate with supply and demand curves the effect of this new law on the quantity of spam email being sent.
Source Yochi J. Dreazan. "Why Some Big Spammers Back Spam-Control Laws." The Wall Street Journal. July 18, 2003.

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